Do’s and don’ts of car insurance policy in the Philippines

It is a well-known fact that car insurance is an essential part of the car ownership journey, to be frank, it is a sign of a responsible owner. Why? Because it provides financial protection to the owner in the event of an accident, natural disaster, or theft. As for the Philippines, understanding the meaning, importance, and type of car insurance policies is crucial for every driver. Therefore we focus on crafting articles to explore more about the subject.

Here we are exploring the dos and don’ts of car insurance with the sole intention to help you make an informed decision and ensure your adequate protection in an uncertain event.

Do’s of car insurance

1. Make sure you have a clear understanding of the different types of insurance coverage

The Philippines car insurance market is flooded with several types of car insurance coverage, which often might overwhelm the owner. And therefore we have covered the different types of car insurance in detail for you here. But here is a short take on types of coverages -

Compulsory Third Party Liability (CTPL)

CTPL is mandatory for all vehicle owners in the Philippines. It covers bodily injury or death of third parties caused by the insured vehicle. Make sure your policy includes this basic coverage.

Comprehensive Insurance

This offers broader protection, covering not only third-party liabilities but also damages to your own vehicle due to accidents, theft, and natural disasters. Evaluate the benefits of comprehensive insurance and consider it for more extensive coverage.

Acts of Nature Coverage

Given the Philippines' vulnerability to natural disasters like typhoons and floods, Acts of Nature coverage is essential. It protects against damages caused by such events, which are common in the region.

Personal Accident Insurance

This covers medical expenses and provides compensation in case of death or disability resulting from an accident. It can apply to both the driver and passengers, offering additional security.

Also Read: Understanding nature and acts of God coverage for your car in the Philippines

2. Always shop around and compare car insurance policies

It is very common and a given as well that insurance premiums and coverages vary significantly between providers. It is therefore advisable to compare different policies on the basis of cost and benefits. Need help with comparing policies? Several online comparison tools can be utilized for this purpose. It is a good idea to seek advice/recommendations from experts, friends, and family members. Also, look for reviews and ratings of insurance companies to gauge their reliability and customer service.

 

3. Do read and understand the police’s terms and conditions

It is always advisable to carefully read the terms and conditions of the car insurance policy. Why? It is good to understand what is covered, what is excluded, and any limitations. This will prevent unpleasant surprises when you need to make a claim. Remember to pay special attention to clauses related to exclusions, deductibles, and claim procedures.

4. Do consider add-ons and riders

One can easily enhance his/her basic policy by opting for add-ons. There are several types of insurance add-on options available like Acts of Nature, Personal Accident Insurance, Roadside Assistance, and more. They not only provide additional peace of mind but also address your specific needs.

How to choose an add-on? It’s simple, just evaluate the requirements and choose add-ons that offer the most value.

5. Do maintain a good driving record

It is an unsaid norm in the insurance industry that drivers with a clean record are often offered lower premiums. So, just avoid violating traffic rules and getting involved in an accident and you’ll be eligible for such discounts.

Remember, a good driving record not only reduces insurance costs but also ensures your safety and that of others on the road.

6. Do notify your insurer immediately after an accident

It is very crucial to promptly inform your insurer about the accident. Make sure to provide all necessary details and documentation to ensure a smooth claims process. As any delay in doing so will complicate your claim. Therefore, it is a must to keep your insurer's contact information readily available for emergencies.

7. Do keep all necessary documents handy

It is crucial to ensure that you have copies of your insurance policy, registration, driver’s license, and other relevant documents in your vehicle. Why? It will prove helpful during inspections and in the event of an accident. Having digital copies stored on your phone can also be beneficial.

8. Do review and update your policy annually

Insurance policy needs may change/be revised over time. Therefore, it is a must to review your policy annually to ensure it still meets your requirements. Also, make sure to update your coverage if you have made modifications to your vehicle or if your circumstances have changed. This can also help you take advantage of any new discounts or coverages available.

9. Do take advantage of discounts

Many insurance providers in the Philippines offer discounts for various reasons, such as bundling policies, installing anti-theft devices, or being loyal customers. So, we suggest you inquire about available discounts and qualification criteria. Getting a discount can significantly reduce your overall premium costs.

10. Do use authorized repair shops

Most insurance companies in the Philippines have a network of authorized repair shops and getting your car repaired ensures quality repairs and faster claim processing. Also, check your policy for the list of approved service centers. These shops often have agreements with insurers for direct billing, thus reducing your out-of-pocket expenses. Great, isn’t it?

Also Read: Must-have car insurance policies for Philippine drivers

Don'ts of car insurance

1. Don't overlook the fine print

Often policyholders make the mistake of not reading the fine print. It usually holds important details about coverage, exclusions, and the claims process. Ignoring this can lead to misunderstandings and denied claims. Also, if there is a term you do not understand, make sure to seek clarification from your insurer.

2. Don’t underinsure your vehicle

While it may sound tempting to save on premiums by opting for minimal coverage, it can backfire in the event of a major accident or loss. Therefore, always ensure your coverage adequately reflects the value of your vehicle and potential liabilities.
Remember, skimping on insurance coverage can leave you financially vulnerable.

3. Don't hide information from the insurer

It is a good idea, to be honest and transparent with your insurer, as hiding details like modifications to your vehicle or your driving history can lead to denied claims and policy cancellations. Also, a full disclosure ensures proper coverage and prevention of any complications during the claims process.

4. Don't ignore the claims process

It is a must for every insurance holder to get familiarized with the claims process and follow it diligently. Ignoring steps or providing incomplete information can delay the claim process or result in rejection. Keep track of all communications and documents at every step to avoid any disputes. Here is your guide to the claim process.

5. Don't miss premium payments

It is advisable to regularly pay your premiums to avoid policy lapses. What’s a lapsed policy? It means you are not covered anymore and any claims during this period will be denied. So guys, set reminders or opt for automated payments to ensure you stay protected. Missing payments can also lead to higher premiums in the future.

6. Don't assume all damages are covered
Not all types of damages are covered by standard policies. For example, wear and tear or mechanical failures are usually excluded. Understand these exclusions and consider additional coverage if necessary. Being aware of these limitations helps manage your expectations.

7. Don't forget to report modifications

If you make any modifications to your vehicle, such as adding a new sound system or upgrading parts, report these to your insurer. Unreported modifications can affect your coverage and claims. Some modifications can increase the value of your car and may require adjustments to your policy.

8. Don't drive under the influence

Driving under the influence of alcohol or drugs can be very dangerous, as it not only involves the risk of life but also invalidates your insurance coverage. The insurance provider will deny claims if the driver is found to be intoxicated at the time of the accident. Therefore always designate a sober driver or use alternative transportation if you have been drinking.

9. Don't let unauthorized drivers use your vehicle

One must ensure that only authorized drivers (as listed in your policy) are permitted to drive the vehicle. The insurance provider can reject the claim because an unauthorized person is driving the car at the time of the accident.

We’d suggest reviewing your policy to understand who is covered and consider adding regular drivers to your policy.

10. Don't neglect regular vehicle maintenance

Regular vehicle maintenance ensures your car remains in good condition throughout and it also prevents accidents. Often insurers may reject claims if it’s found that the accident was caused due to poor maintenance. It is advised to keep records of all maintenance work as proof of proper care.

Bottom line

Car insurance is a critical component of vehicle ownership not only in the Philippines but around the world. By understanding the dos and don'ts of car insurance policies, you can ensure adequate protection and preparation. Just take the time to research, compare, and analyze.

Also Read: Important insurance terms a car buyer should know